Do not expect any official announcement from one of Prime Minister Benjamin Netanyahu's many spokespersons, and do not wait for an official statement by Minister of Finance Yuval Steinitz, but the Trajtenberg committee recommendations are dead. The funeral procession left the Prime Minister's Office in Jerusalem, via the Finance Minister's office one street away, on its way to the Knesset. At Netanyahu's request, there will be no eulogy.
Netanyahu killed Trajtenberg in the manner of a skilled politician - softly, with a loving hug, while agreeing with every word of the report. He first accepted the recommendations in full, then fought heroically against the ministers who expressed reservations, but then sent the recommendations to a committee to be chewed up by the Jerusalem bureaucracy. There, between the Ministry of Finance and the Ministry of Justice, between the lobbyists and the special interests, the Trajtenberg recommendations melted away until nothing was left.
Take the surtax for example. This was a 2% tax on any income over NIS 83,000 a month, or NIS 1 million a year. No one in the middle class would be affected. People earning NIS 1 million a year do not belong to the middle class, but are wealthy. The importance of the tax is declarative: the revenues (NIS 400 million a year) are not the point, but the intent - there is social justice, and the wealthy should contribute their share. The tax vanished from the legislation through a maneuver by Minister of Finance Yuval Steinitz and Knesset Finance Committee chairman MK Moshe Gafni (United Torah Judaism) just before the Knesset vote on it.
Instead of the surtax, we have a tax on cigarettes and tobacco for nargilas. There is no question that Netanyahu listed to the voice of the people. After all, hundreds of thousands of people came on to the streets during the summer carrying placards declaring "Tax cigarettes", "The people demand a tobacco tax for nargilas".
The housing items in the Trajtenberg report are now disappearing. Gafni and Minister of Housing and Construction Ariel Atias are trying to dilute and crush any recommendation that would hurt the haredim (ultra-orthodox) and their guaranteed housing. Even as they roll they eyes heavenward in the name of poor families, affordable housing has disappeared. The criteria that benefit secular people, people who serve in the army, and who are characterized by small families, have vanished. There will be government housing benefit, oh absolutely, but they will not be for the people who demonstrated in the streets for social justice, nor for the middle class.
Free education for toddlers, another flagship item of the Trajtenberg report, is dying a slow death. There is actually a consensus favoring it, but there is no money. The budget source for it is a cut in defense spending, which Minister of Defense Ehud Barak vehemently opposes, and it is unlikely to be implemented. Barak does not, of course, object to free education, he only wants no cut in the defense budget. As an alternative, he proposes exceeding the deficit target, but Steinitz opposes this.
Protests mature slowly
Yes, Netanyahu has won. There is no doubt; he has dissolved the Trajtenberg recommendations, crumbled the social protest without it achieving anything and at no personal cost. On the contrary, his popularity is at a peak. The protest is off the public agenda, and the public is now engaged with Iran and laws designed to harm the media, the legal system, or merely Muslims.
Netanyahu is a well-known amateur historian. Many history books are on the shelves in his library, ranging abiography of Augustus to the life and times of Theodore Roosevelt. Here are two historical examples that might teach Netanyahu something. There is no need to go far - merely look at the past 40 years of Israeli history: the protest of Motti Ashkenazi in the wake of the 1973 Yom Kippur War, which led to the political upset in 1977, which brought the Likud to power for the first time; and the "We're sick of the corruption" demonstrations after the "dirty trick" in 1990, which turned into a Likud rout in the elections two years later.
Hundreds of thousands of people came out on to the streets last summer to demand social justice. Netanyahu and the political system have given them the finger. Protests, as we have seen, take time to mature into political change. Netanyahu has won a battle, but not the war. The next round will soon in coming.
Published by Globes [online], Israel business news - www.globes-online.com - on December 15, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011